What the Heck are NFTs and How People are Earning Millions on Non-FungibleTokens?
All you need to know about NFTs
Hundreds of news have been revolving around my socials on NFTs, which made me curious to learn about what they are and how people are earning big dollars using NFT tokens. So, I researched a bit about them, and here’s what I found.
NFT tokens have gotten the attention of the entire art industry: they use them to make money on digital paintings and even memes. Let’s understand how they work, and how they are changing the digital art market.
In February of this year, the amount earned on NFT increased to $ 340 million. This is more than the earnings from all digital auctions over the past year. Thanks to NFT, singer Grimes earned nearly $ 6 million in 20 minutes, and artist Beeple made 69 million in just one painting.
More and more authors are using NFT tokens because it is more convenient to make money with them and to protect copyrights, and because it is more convenient for users to collect content. Now any artist can sell for money not only a digital painting but also GIF-animations, videos, and even memes.
NFT technology (Non-Fungible Token) is part of a blockchain. Blockchain is a system that stores information in blocks about all previous operations within the chain. This is necessary for storing data: you cannot simply remove a separate block from such a system without destroying the entire chain.
Each record in such a chain is called a token. In an open blockchain, all tokens can be replaced with identical ones, but this cannot be done in the NFT system. If you have, for example, bitcoin, you can exchange it for another bitcoin, identical to yours. NFT tokens are unique and cannot be replaced.
It is thanks to such tokens that anyone can easily secure the rights to a unique digital object - a picture, video, or object in the game. In other words, NFT allows you to buy not the product itself, but the ownership of it by attaching a token with information about the owner to the file.
Any artist wishing to attach a token to their work can use the OpenSea or Rarible platforms. It is noteworthy that OpenSea creates NFT tokens only after a buyer is found for them. In this case, the author does not need to pay a commission to the Ethereum blockchain. The Rarible platform, on the other hand, creates tokens immediately after uploading the work to the service and takes a commission from the author.
At the moment, the technology can work with a large number of types of content - pictures, videos, animations, and even memes.
South Carolina artist Mike Winckelmann aka Beeple, whom we mentioned above, auctioned a huge collage of 5,000 digital images at Christie's, which he painted daily for 13 years. For the famous auction house, the sale of fully digital art was the first in the history of Christie's. On March 11, the collage sold for a record $ 69 million.
NFT tokens are also actively used in games with internal purchases in order to confirm the ownership of virtual items - armor sets, weapons, buildings, and skins. This is necessary, first of all, so that players can transfer items between their accounts, resell them, and also declare ownership using tokens. At the same time, the players do not have the copyright for these items, they are still with the developer company, however, the NFT token confirms the undeniable ownership of the system.
But the most unusual way to use NFT tokens was demonstrated by the Injective Protocol company. The company bought Morons (White) by artist Banksy for $ 95,000 and burned the painting on Twitter. The company then tied the non-fungible token to the digital version of the destroyed work.
Morons (White) now exists only digitally and belongs to the Injective Protocol. The company announced that it took such a step in order to create a full-fledged crypto art from physical work that exists only in the digital space.
In addition to paintings and music, thanks to NFT, a full-fledged meme was also sold at the auction. Last month, the popular in the tenths Nyan Cat, a pixel cat that flies through space to a cheerful chiptune melody, went under the hammer. The meme cost the future owner about 580 thousand dollars.
Thanks to NFT tokens, content authors (artists, musicians, video makers, bloggers) can earn money without intermediaries, receiving funds directly from the audience. In addition, NFTs allow you to make money on exclusive (and expensive) trades.
According to CoinDesk, in February 2021, users spent about $ 100 million on crypto goods that do not physically exist. Thanks to this, many artists without a world name began to earn much more. For example, Halo Infinite art director Nicolas Bouvier sold his crypto art for nearly $ 35,000, while former DC artist Jose Delbo made around $ 2 million from Wonder Woman's drawings.
NFT tokens allow the audience to support a financially beloved author and give users the right to use digital content, be it posting on social networks, using it as an avatar, and so on. In addition, works with an attached NFT are a kind of collectible asset, the value of which can rise or fall over time.
If a picture is attached to such a token, which exists in only one copy, its value will be as high as possible. A striking example is a collage from Beeple, which was mentioned earlier.
Tokens can permanently change the system by which digital content copyrights work and protect crypto paintings and videos from illegal copying. NFT will also greatly ease the burden of copyright for musicians and allow streaming services to license films and series more quickly.